Frequently Asked Questions
In most of the cases Dubai is completely tax-free:
- No tax on the gained profits for legal entities.
- No income tax for company owners and employees.
- Dubai has a simplified financial reporting system which means there is no need to carry out annual audits.
There is no limit to the investment required to set-up a business in Dubai. Depending on the activities of your business, investing partners, the location of your business etc. You can invest as much or as little as you want to keep in mind the benefit of your employees and anyone involved in the business.
Licensing to carry out business activities in Dubai happens in three stages.
- Initial approval where an individual or a company submits an application for approval of the activities intended for the said business.
- Ensuring all legal requirements are met by the investor. This includes authentication of the investor’s identification, educational qualifications and all financial matters involved in the establishment of the business.
- Verification of the business premises and issuance of the investor visa.
Dubai and other emirates have allowed foreign investors to set up business in different areas of Dubai without the help of any local sponsor. These areas are called Free zone. However, Free zone entities can carry out their operations within the specified zone. This is a problem for companies whose target market is Dubai / UAE. However, you can appoint distributors, local agents or brokers for local markets. Setting up business in mainland requires a UAE National as a sponsor.
The business structure is different than that of setting up in the free zone. The sponsor must own 51% of the total shares however law allows the local sponsor to grant complete power of attorney to the foreign national and avoid any involvement in the operations of the business.
Depending on the company type, there are different types of visa requirements in Dubai. To live and work in Dubai, every foreign national need a residence visa and, In order to employ staff in your organization the manager of the company must have a residence visa which will then allow the company to recruit staff. Offshore incorporations do not require a residence visa as these do not entitle the holder to do business in UAE. Free zone incorporations allow for the issuance of residence visas depending on the size of the establishment.
It can take as little as five days or can take up to six weeks to start your business in Dubai depending on the company type and structure. Company registration is the initial step of which it is a matter of gathering all documentation.
All documents required for the issuance of residence visa and company registration need to be attested by the UAE embassy or consulate in the country of document origin. Furthermore, the same documents need to be attested by the Ministry of Foreign Affairs, UAE in Dubai.
Dubai is the financial hub in the Middle East. Thanks to its two ports, Dubai dominates the cargo and re-export markets. For over 20 years, Dubai economy has shown substantial growth with investment pouring in from all corners of the globe. It is also home to two major airlines Emirates and FlyDubai, with emirates being one of biggest airlines in the world. Apart from this, Dubai has a very large physical infrastructure spread all over the state with all kinds of services available almost everywhere.
Dubai has an entirely different set of laws for foreign investors who are setting up their businesses in Dubai. Paperwork and legal requirements are minimal and procedures are fast tracked so that it is extremely easy to set up a company, licensing and registration. Moreover, Dubai has laws and rules for hiring employees and their benefits are protected.
Dubai has probably the largest physical infrastructure in the region for businesses. The governing bodies of Free Zones provide excellent warehousing, office spaces, and other services.
People from more than 200 nationalities live and work in Dubai. There is no shortage of manpower in UAE. Both skilled and unskilled labor come to Dubai in search of work opportunity. Once you have established a country, you can either hire from the pool already available in Dubai or you can opt to hire people from your country of origin after fulfilling legal requirements.
The Government of Dubai and UAE provide all kinds of support for establishing a company or investing in UAE, like help with documents, licenses and so on.
Yes. More than three-quarters of goods entering the emirate are duty- free. Free trade zones in Dubai offer incentives to imports including exemptions from taxes and duties. The open border foreign trade policy has proved a major factor in allowing small businesses to expand.
Dubai has been one of the top places to live in. It is also recognized as the fastest growing cities in the world and has the lowest crime rate. The emirate is home to several architectural wonders. Lifestyle in Dubai has always been ranked at the top of the index.
Free zone company
- No income or capital gain tax.
- No corporate tax.
- No duties on imports or exports.
- 100% foreign ownership.
- No recruitment problems as Dubai has a large number of skilled professionals and un-skilled labor.
- Attractive working environment.
- No restrictions on currency.
- Excellent support services from free zone authorities and the Government of Dubai.
An offshore company offers you a list of advantages:
- Operating costs are reduced while increasing overall profit of the company.
- Outsourcing of desired talents and skills optimizes the efficiency of the company.
- Core competencies are polished with more productivity.
- Higher value is created with re-allocation of the internal resources.
- Problematic and tough functions are efficiently managed.
- Internal issues are rightly addressed with a cost-effective approach.
There are two broad categories of offshore companies:
- The companies that enjoy exempt from taxation according to the jurisdiction based on the reason that the person doing business was not the resident in that jurisdiction.
- The companies which do not fall under offshore jurisdiction that do not impose any taxation on them and thus, these companies are de facto tax-exempt.
Though all offshore companies are different in their nature and according to the corporate law of the individual country, they carry certain features:
- In the home country, they are not subject to taxation.
- Being not subject to taxation does not mean that they are tax-exempt abroad as well.
- In the developed countries, regulation of corporate activities is heavier while in under-developed countries, it is lighter.
- Information about the offshore company is generally restricted or hidden from the public and this limitation depends on the jurisdiction of the country. Most of the jurisdictions on international level have laws to keep an access to the information both locally and offshore.
- Most of the offshore jurisdictions have removed corporate restraints like constraint on corporate capacity and profit, limit on capitalization, and strict rules on financial assistance.
- Special corporate provisions have been introduced and enacted to attract businesses and special mechanism has been made to create smoothness to allow complicated business transactions.
- Offshore companies are made to offer services to private and commercial sector. Some of them are beneficial and legitimate but most of them are under harsh criticism in the media because they are reported as hiding the white collar crime such as fraud, money laundering, and tax evasion.
- They are used in a large variety of transactions like listing vehicles, joint ventures, and holding companies.
- Private wealth is handled with offshore companies for privacy and tax mitigation.
- Their usage in tax planning has met with controversial debates worldwide. Therefore, prestigious companies are avoiding offshore to save themselves from negative impression and criticism in home country and abroad.
- Another intermediate and legitimate use of offshores is private health holding vehicles and investment funds.
- Offshoring is also used as a part of business process.
Formation of these banks and financial institutions aims at:
- Opening the corporate as well as personal bank accounts of the clients and providing them all related services
- Working on insurance and investment money
- Granting of loans to the clients
- Working with leasing and loan products
- Repurchasing and sales of debt obligations
Offshore banks are preferred by the clients with offshore companies because these banks:
- Dilute the risk of political instability in the country.
- Have a sounder banking system that is smoother than the other banks.
- Have the currency that is diversified.
- Protect you from the legal restraints and government agencies that have the summary power to freeze the assets when they want.
- Offer a higher rate of interest on your deposits.
- Enable you to get medical care abroad in case of medical emergency.
- Keep and maintain your privacy in a limited way.
- Are quick in their processing.
- Ensure your personal freedom and liberate you from the government control on your destiny.
- Provide you complete peace of mind with no risk from the bankruptcy of the government.
These are the remarkable benefits of onshore companies:
- Operating costs are more controlled and reduced.
- Strategic imperatives of the company are more concentrated.
- Higher value is obtained through a better allocation of internal resources of the company.
- Better understanding of internal resources and core competencies is achieved.
- World-class talents and capabilities are accessed with this global approach.
- A deep insight of the limitation of internal resources is obtained.
- Difficult problems and complications are addressed in a more effective way.
- An onshore company provides an optimal conditions to successfully run the business in the home country as well as outside the country.
- Transformation efforts for the business are accelerated to optimize the business process.
- Residency visas are easier to obtain because of an onshore company.
Some countries facilitate the owners of onshore companies with extra perks like:
- No Value-added Tax (VAT)
- No corporate taxation
- No regulation on currency exchange
- Supporting environment and growth opportunities
- Stable economic conditions
- Complete and exclusive ownership of company by the foreign national
- No particular requirements as shareholder, residency, directorship, and citizenship
- Complete repatriation of profits and the capital
- Both owner and employees have an equal opportunity to get residency visa when you are registered with an offshore company.
- Onshore company be will authorized to conduct its business operations.
- Onshore companies are free to carry their business operation in the country as well as outside the country.
- CV carrying complete information and qualification for the desired business in a particular domain
- Copies of the passport
- Utility bills of last three months
- Business outline and course of business process
- Recommendation letter issued by a banking authority
- Bank statement since last 6 months
- Any other supporting document for operating business on international level
If someone wants an onshore company in another country, he should have to register the company with a partner resident of that country. It will be under foreign ownership and the owner will require a license from the relevant government authorities of that country. Apart from registering the onshore company, such activities in different countries are also subject to license:
- Production processes.
- Trading companies trading in different items.
- Logistics, supply chains, and transportation facilities.
- Services provided to the public and businesses.
Registering your company in UAE gives you
- 100% ownership of your investment
- 100% return of capital and profits
- No import and export duties charged
- Exemption from corporate tax and dividend tax
- Access to better infrastructure and skilled labor
- Cheap energy and 24 hours a day work operations
Registering your company with the government body (DED) gives you the following benefits
- Conduct business in any part of UAE
- Better deals in renting offices and warehouses
- Foreign equity remains stable at 49%
- No yearly auditing and no corporate tax
- Gets investor visa and invite family to live them in UAE
- Investor becomes partner in the business
- Easily get employee visas for foreign labor
Choosing legal form for your company again depends on your business type, level of activity, number of owners, nationality of owners and ownership criterion. Three most common forms are:
- Free Zone Establishment (FZE) which allows only one shareholder
- Free Zone Limited Liability Company (FZ-LLC) in which allows multiple shareholders
- Branch Office
- Dubai Airport Free Zone
- Dubai Flower Centre
- Dubai International Financial Centre
- Dubai Auto Zone
- Dubai Gold and Diamond Park
- Dubai Healthcare City
- Dubai Logistics City
- Dubai Knowledge Village
- Dubai Outsource Zone
- Dubai Multi Commodity Centre
- Jebel Ali Free Zone
- Dubai Silicon Oasis
- International Humanitarian City
- Techno Park
The primary documentation is based on the following provisions
- Application form
- Passport copy of shareholder(s)
- Memorandum of Association
- Article of Association
- Chamber of Commerce Extract
- Board Resolution (if needed)